MEXICO – US TRADE RELATIONSHIP 

 Mexico is currently the United States’ largest source of imports. According to Investopedia, the United States imported approximately $506 billion worth of goods from Mexico in 2024.

As part of the United States’ strategy, the imposed tariffs since the beginning of 2025 have included Mexico. Tariffs of around 25% on imports from Mexico were enacted under executive orders, targeting sectors such as automotive, agricultural products, and manufactured goods. Below is a summary of current tariffs applicable to Mexico:

However, despite these new measures, more than 84% of Mexico’s exports to the U.S. remain duty-free under the provisions of the USMCA. Only the remaining 16%—primarily non-USMCA goods such as certain auto components, steel, and aluminum—are subject to the 25% tariff.

CHINA – US TRADE RELATIONSHIP

Since the start of the U.S.–China trade war, bilateral trade between the two countries has steadily declined. Many companies have responded by shifting production closer to the United States through nearshoring, with Mexico emerging as a primary destination. As a result, Mexico has now overtaken China as the United States’ top trading partner.

According to The Wall Street Journal, U.S. imports from China fell from 22% of total imports in 2018 to around 12% by early 2025. In value terms, imports dropped from $505 billion in 2018 to $439 billion in 2024—a $66 billion decline. This underscores the significant impact tariffs have had on the U.S.–China trade relationship, an effect that is expected to persist.

US – CHINA TARIFFS

On August 12, the United States and China agreed to extend their tariff truce for another 90 days, until November 10, 2025, postponing the implementation of additional duties on each other’s goods. This agreement temporarily eases tensions in a trade relationship that has been marked by escalating tariffs, retaliatory measures, and mounting uncertainty for businesses.

Futhermore, this extension prevents U.S. tariffs on Chinese products from surging to 145%, while Chinese tariffs on U.S. goods were set to reach 125%—levels that experts considered would have created a near-total trade embargo between the two economies, severely disrupting global supply chains, increasing consumer prices, and placing additional pressure on companies reliant on cross-Pacific trade. In addition, the potential breakdown of trade flows could have pushed businesses to accelerate diversification strategies, benefiting alternative manufacturing hubs like Mexico.

As of now, the US tariffs imposed will remain as follows:

IMPLICATIONS FOR CHINESE INVESTORS IN MEXICO

Mexico has been among the countries least affected by recent U.S. tariffs, largely thanks to the protections offered under the USMCA. Establishing operations in Mexico can be highly advantageous—particularly when the finished goods manufactured meet the USMCA rules of origin. Mexcentrix can assist by analyzing Bills of Materials (BOMs) to verify whether a product qualifies as USMCA-origin, potentially delivering significant tariff savings compared to the rates currently applied to Chinese products.

While USMCA provisions shield the majority of Mexican exports from new duties, certain sectors—most notably automotive—continue to face substantial challenges. Nevertheless, investor sentiment remains strong, with many projects moving forward. This is driven by the competitive advantages of USMCA protections and the deferred implementation of some tariff measures, even as uncertainty lingers for select foreign investors.

For all countries, balancing protectionist policies with the benefits of integrated supply chains will be key to sustaining growth, stability, and competitive advantage in the global market.

For companies navigating these new challenges, Mexcentrix Services can provide the expertise and operational support needed to establish manufacturing operations in Mexico efficiently. From compliance, cost optimization, risk reduction, and supply chain integration, Mexcentrix helps businesses adapt to changing trade conditions.

On April 2, 2025, during “Liberation Day” President Trump announced a 10% base tariff on almost all imports and added steep “reciprocal” tariffs on more than 60 nations, scheduled to take effect on April 9. These were delayed 90 days to accommodate negotiations, then postponed again to August 1, and entering into effect as of today.

Court challenge: A federal court ruled in May that this action overstepped executive authority under the International Emergency Economic Powers Act (IEEPA), but enforcement was paused pending appeal, keeping the tariffs active.

What Is Changing on August 1, 2025

• Base tariff: 10% on most imports.
• Targeted increases:
  • European Union and Mexico: Originally 30%, now reduced to 15% across some goods following a July 27 agreement. However, steel from Mexico will be subject to a 50% tariff only for shipments exceeding the annual bilateral quota. Mexican products tht comply with the USMCA Rules of Origin are exempt of the 30% tariffs.
  • Canada: Up to 35%, implementation delayed to September 1, 2025.
  • Brazil: 50% on broad imports.
  • Copper products: 50% tariff now applies only to finished copper goods; raw copper is exempt.
  • Japan and South Korea: 25%, delayed to September 1, 2025.
  • India: Newly added – 25% tariff on key industrial goods and electronics.
  • 150+ other nations: Tariffs between 10–15% expected.

Additionally, revised enforcement letters were sent to 30 countries, clarifying the scope and timelines.

International Response and Repercussions

In response to the U.S. imposing tariffs, countries around the world have reacted in various ways:

Mexico denounced the tariffs as a violation of the USMCA and proposed retaliatory tariffs on U.S. goods like pork and cheese. However, it emphasized a preference for negotiation and suggested creating a joint diplomatic working group.

Canada, led by Prime Minister Carney, called the tariffs unjustified and reaffirmed its own 25% counter-tariffs on C$155 billion worth of U.S. goods. This sparked a “Buy Canadian” boycott as a form of protest.

China condemned the tariffs, imposing counter-tariffs on U.S. exports like soybeans and LNG, accusing the U.S. of economic coercion.

South Korea and Japan criticized the U.S. tariffs and called for negotiations. South Korea also introduced emergency support measures for its exporters to ease the impact.

Australia expressed disappointment, describing the tariffs as unfriendly, but chose not to retaliate. Instead, it sought an exemption through diplomatic dialogue.

Taiwan negotiated a 20% tariff rate and continues to push for better terms, citing its strategic economic alignment with the U.S.

Meanwhile, countries like Thailand, Cambodia, and Pakistan welcomed the new tariff structure, viewing it as an opportunity to grow their trade with the U.S.

Source: Financial Times, Reuters, Canadian Governmen, CNBC

Economic Impact

Prices are already rising across multiple sectors, particularly within the manufacturing industry. Companies are facing elevated input costs due to increased tariffs on critical materials like copper, steel, and electronics components.

Key sectors such as automotive, industrial machinery, and technology are experiencing significant disruptions in pricing and supply chains. Financial markets have shown a mixed response: equities remain steady, while the dollar has weakened due to trade-related uncertainties.

Summary Table 

August 1 represents more than just a policy deadline; it marks a significant turning point in the United States’ approach to global trade. Whether the tariffs result in new trade agreements or spark a broader trade conflict, their effects will be far-reaching.

For further information or inquiries, please contact us. Mexcentrix experts are available to assist with insights, USMCA compliance analysis and studies, and strategic guidance regarding the upcoming tariff changes.

A Strategic Location in the Heart of Mexico

Nestled in the Bajío region, San Luis Potosí is within easy reach of major hubs like Mexico City, Guadalajara, Monterrey, and key U.S. border crossings. It has direct access to key highways such as Federal Highway 57 and modern rail networks. Its central location also ensures competitive distances to Mexico’s main ports: approximately 750 km to Lázaro Cárdenas, 700 km to Manzanillo, and 650 km to Veracruz, strengthening its logistics and export capabilities via both the Pacific and Gulf coasts.

Accelerating Industrial Momentum and Building Availability

This expansion is largely driven by a strong manufacturing sector. The region also boasts a Class-A facility inventory nearing 28 million square feet, with vacancy rates remaining low and highly competitive at around 2.5%.

Centerpiece: Automotive Cluster

In Q1 2025, San Luis Potosí produced 82,831 vehicles, operating at 70.8% capacity.

• GM led with 55,655 units.
• BMW assembled 27,176 units.

There were also USD 39.4M in new automotive investments, with expansions by Continental, JTEKT, and SL MEX, the latter opening a headlamp plant, creating 385 jobs. SLP remains a key automotive hub in Mexico.

Diversification: Aerospace & Beyond

Manufacturing here isn’t limited to cars. The aerospace sector is experiencing a boom cumulative FDI in aerospace now exceeding US$130 million, transforming SLP into a centralized supplier of high-precision aircraft components and systems. Over 4,100 new jobs across five major aerospace plants exemplify this trend. Meanwhile, electronics, medical devices, appliances, and food-processing niches continue to expand.

A Well-Prepared Workforce

Approximately 20% of San Luis Potosí’s 1.2 million economically active residents work in manufacturing, providing the region with a strong and stable labor force. This strength is further reinforced by industry-education partnerships, including dual-training programs developed with BMW, Cummins, local universities, and technical institutes, which focus on enhancing skills in mechatronics, materials, and automation.

Competitive Operations & Infrastructure

San Luis Potosí boasts a highly competitive operational environment supported by modern infrastructure and a strategic geographic location. The state is well-connected through major federal highways and rail networks, facilitating efficient access to key seaports such as Manzanillo and Altamira, the U.S. border, and central Mexico. Additionally, it benefits from a growing international airport and a portfolio of well-developed industrial parks equipped with world-class facilities and utilities.

As of May 2025, data from Solili reports that the average industrial lease rate in San Luis Potosí stands at approximately USD 5.58 per square meter per month (around USD 0.52 per square foot per month), positioning the state as one of the most cost-competitive industrial rental markets in Mexico.

In 2025, the state has at least 25 industrial parks (both public and private), with 18 currently operational across seven key municipalities.
Since 2022, six new parks have been inaugurated, with more under development in Villa de Reyes, Santa María del Río, and Mexquitic de Carmona.

Government Incentives & Business Climate

Both federal and state authorities extend tax-related incentives or other types of incentives. SLP’s business environment is further acclaimed for political and labor stability, streamlined permitting, and active recruitment support. In the second quarter of 2024, San Luis Potosí attracted USD 1.064 billion in FDI, representing 3% of the national total, positioning it as the seventh state to receive the most investment in that period.

Why Manufacturers Should Take Notice

San Luis Potosí has transformed into a compelling site for manufacturers seeking scalability, regional connectivity, and stable, cost-effective production. Its rapidly evolving ecosystem, anchored by global OEMs, diversified into high-tech sectors, and underpinned by an avowed workforce, positions it as a rising star in Mexico’s industrial narrative. As companies pivot forward, SLP offers an environment equally rich in promise and substance.

If you want more detailed information or personalized guidance about investing and manufacturing opportunities in San Luis Potosí, consider reaching out to Mexcentrix, with headquarters in San Luis Potosi, is a trusted partner that specializes in easing business expansions in the region. Their expert insights and hands-on support can help you navigate the local landscape and maximize your success in this vibrant market. Contact us!

In today’s fast-paced global market, manufacturers constantly seek ways to cut costs without sacrificing quality or efficiency. One of the most effective approaches is to expand or relocate operations to Mexico, a country that offers an ideal combination of low cost and a skilled workforce.

Mexico’s Manufacturing Wages vs. U.S.

When comparing manufacturing wages, Mexico offers a clear cost advantage over the U.S, allowing companies to keep margins while scaling operations.

Both México’s and the United States’ labor costs vary per location and industry; nevertheless, below you can find approximate fully burdened rates for some common positions in the manufacturing industry:

United States Labor Costs Source: U.S. Bureau of Labor Statistics,  Occupational Employment and Wage Statistics (OEWS) Profiles, May 2024 Profiles.  

A Skilled and Growing Workforce

Mexico continues to invest in education and vocational programs, producing a growing pipeline of engineers and technicians. Many companies from Germany and its surrounding have benefited from the dual education model.

Furthermore, regions such as Bajío, Monterrey, and Tijuana are recognized for their industrial ecosystems and technical universities, making them attractive hubs for advanced manufacturing.

This ongoing investment in human capital ensures that manufacturers can count on a reliable workforce to support long-term growth.

Regional Flexibility for Operational Strategy

Mexico’s labor market also provides geographic flexibility. While northern border areas often have higher labor rates due to increased demand and cost of living, central and southern regions can offer more affordable options while still maintaining access to infrastructure and skilled labor. In the southern region there is still a need for training and qualifying personnel for the manufacturing industry.

This diversity allows manufacturers to customize their site selection based on budget, logistics, and access to supply chains or export routes.

Why Mexico Makes Strategic Sense

In addition to finding cost savings in real estate and logistics costs, with its affordable and skilled labor, Mexico has become a go-to destination for manufacturers aiming to reduce costs and increase efficiency. It’s not just a matter of lowering expenses; it’s about building a scalable, resilient, and responsive supply chain close to major consumer markets.

Moreover, operating under a shelter company like Mexcentrix, we can help you save up to 40% in the start-up phase and up to 20%

Ready to Establish Your Operations in Mexico?

At Mexcentrix, we help international companies navigate every step of the manufacturing setup process from site selection and legal compliance to full shelter services and operational support. Contact us today to learn how we can support your success in Mexico.